BOSTON CAPITAL REAL ESTATE INVESTMENT TRUST, INC.
Up to 21,000,000 Shares of Common Stock/$210,000,000
DEALER-MANAGER AGREEMENT
_________ __, 2003
Boston Capital Services, Inc.
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000-0000
Dear Sirs:
Boston Capital Real Estate Investment Trust, Inc., a Maryland
corporation (the "Company"), is registering with the Securities and Exchange
Commission (the "Commission") for public sale (the "Offering") a maximum of
21,000,000 shares of its Common Stock, $.001 par value per share (the "Shares"),
to be issued and sold for an aggregate purchase price of $210,000,000
(20,000,000 shares to be offered to the public and 1,000,000 shares to be
offered pursuant to the Company's dividend reinvestment plan). The Shares are to
be sold for a per share cash purchase price of $10.00, and the minimum purchase
by any one person is 100 shares except as otherwise indicated in the Prospectus
or in any letter or memorandum from the Company to Boston Capital Services, Inc.
(the "Dealer-Manager").
The Company hereby authorizes and appoints, subject to the terms and
conditions of this Agreement, the Dealer-Manager to organize a group of
soliciting dealers (the "Soliciting Dealers"), consisting of brokers and
dealers, who shall be members in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"), to solicit purchasers of the Shares.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Dealer-Manager that:
(a) The Company has filed with the Commission a Registration
Statement on Form S-11, Registration No. 333-______ and a related
preliminary prospectus for the registration of the Shares under
the Securities Act of 1933, as amended (the "1933 Act"), and has
filed such amendments thereto and such amended preliminary
prospectuses as may have been required as of the date hereof.
Such registration statement as amended and the amended prospectus
on file with the Commission at the time the registration
statement becomes effective are herein called the "Registration
Statement" and the "Prospectus" respectively, except that (A) if
the Company files a post-effective amendment to such registration
statement, then the term "Registration Statement" shall,
from and after the declaration of the effectiveness of such
post-effective amendment, refer to such registration statement as
amended by such post-effective amendment, and the term
"Prospectus" shall refer to the amended prospectus then on file
with the Commission, and (B) if the prospectus filed by the
Company pursuant to either Rule 424(b) or (c) of the rules and
regulations of the Commission under the 1933 Act (the
"Regulations") shall differ from the prospectus on file at the
time the Registration Statement or the most recent post-effective
amendment thereto, if any, shall have become effective, the term
"Prospectus" shall refer to such prospectus filed pursuant to
either Rule 424(b) or (c), as the case may be, from and after the
date on which it shall have been filed. The Commission has not
issued any order preventing or suspending the use of any
preliminary prospectus or the Prospectus.
(b) The Company at the Offering's closing date (or at each of its
closing dates if the Offering shall have more than one closing)
will be duly organized and legally existing as a corporation
pursuant to the laws of the State of Maryland with full power and
authority to conduct business as described in the Prospectus; the
Company has the power and authority to enter into and perform
this Agreement; the execution and delivery of this Agreement by
the Company has been duly and validly authorized by all necessary
action; the execution and delivery of this Agreement, the
fulfillment of its terms and consummation of the transactions
contemplated hereunder do not and will not conflict with or
constitute a breach or default under any other agreement,
indenture or instrument by which the Company is bound, or any
law, regulation or order applicable to the Company or its
respective properties; this Agreement constitutes the valid and
binding agreement of the Company, enforceable against it in
accordance with its terms.
(c) At the time the Registration Statement initially becomes
effective and at the time that any post-effective amendment
thereto becomes effective, the Registration Statement and the
Prospectus, and at each closing date the Prospectus, will comply
with the provisions of the 1933 Act and the Regulations; at the
time the Registration Statement initially becomes effective and
at the time that any post-effective amendment thereto becomes
effective the Registration Statement will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; and at the time the Registration
Statement or an amendment thereto becomes effective, and the
Prospectus at each closing date, will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made,
not misleading; provided, however, that the representations and
warranties in this paragraph shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made
in reliance upon and in conformity with information furnished to
the Company in writing by the Dealer-Manager expressly for use in
the Registration Statement or the Prospectus. Every contract or
other document
2
required by the 1933 Act or the Regulations to be filed as an
exhibit to the Registration Statement has been so filed.
(d) Any supplemental sales literature or advertisement, regardless of
how labeled or described, used in addition to the Prospectus in
connection with the Offering which is furnished or approved by
the Company ("Authorized Sales Literature") shall, to the extent
required, be filed with and approved by the appropriate
securities agencies and bodies.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE DEALER-MANAGER.
The Dealer-Manager hereby represents, warrants and agrees with the
Company that:
(a) Solicitation and other activities by the Dealer-Manager hereunder
shall be undertaken only in accordance with this Agreement, the
1933 Act, the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and the applicable rules and regulations of the
Commission and any other applicable securities or blue sky laws
and regulations. The Dealer-Manager agrees that through the
termination date of the Offering indicated in the Prospectus (the
"Termination Date") it will not use or authorize the use of any
solicitation material other than the Prospectus and Authorized
Sales Literature.
(b) The Dealer-Manager is a broker-dealer registered with the
Commission and with each state in which it intends to make an
offer (but not necessarily in each state in which a Soliciting
Dealer may make an offer); it is, and will remain until the
Termination Date, a member in good standing of the NASD and
agrees to comply with the provisions and applicable rules and
regulations relating to the suitability of investors, including,
without limitation, the provisions of Article III.C of the
Statement of Policy Regarding Real Estate Investment Trusts of
the North American Securities Administrators Association, Inc.
(the "NASAA Guidelines"); and each sales representative of the
Dealer-Manager making offers or sales of Shares is properly
licensed in each such jurisdiction where he intends to so act.
The Dealer-Manager acknowledges that it has reviewed the
Prospectus and Authorized Sales Literature and has determined
that the suitability standards are fully disclosed and are
consistent with the NASAA Guidelines. In recommending to a
potential investor the purchase, sale or transfer of Shares the
Dealer-Manager shall:
(i) have reasonable grounds to believe, on the basis of
information obtained from the investor concerning his
investment objectives, other investments, financial
situation and needs, and any other information known by the
Dealer-Manager or an associated person, that:
(A) the investor has a fair market net worth
sufficient to sustain the risks inherent in an
investment in the Company, including loss of
investment and lack of liquidity; and
3
(B) the Company is otherwise suitable for the
investor; and
(ii) will maintain in its files documents disclosing the
basis upon which the determination of suitability was
reached as to each investor.
The Dealer-Manager hereby represents that it will communicate to
each of its sales agents, representatives and other appropriate
persons associated with it the above-referenced suitability
standards, and the Dealer-Manager shall require each Soliciting
Dealer that it may engage to acknowledge compliance with the
NASAA Guidelines. Furthermore, the Dealer-Manager shall not
execute any transaction in the Company in a discretionary account
without prior written approval of the transaction by the
potential investor.
(c) The Dealer-Manager shall provide a copy of the Prospectus to each
prospective investor to whom the Dealer-Manager shall directly
effect a sale of Shares at the time of such sale of Shares to
such prospective investor. It shall not, in connection with the
offer and sale of Shares, give any information or make
representations, nor shall it authorize others to give any
information or make representations, other than such information
and representations as are contained in the Prospectus or in any
Authorized Sales Literature.
(d) Each Soliciting Dealer engaged by the Dealer-Manager will be a
broker-dealer registered with the Commission and with each state
in which it intends to make an offer, will be a member in good
standing of the NASD and will agree to comply with the NASAA
Guidelines, and each sales representative employed by a
Soliciting Dealer who makes offers or sales of Shares will be
properly licensed to sell securities in the jurisdictions where
such representative makes offers or sales.
(e) The Dealer-Manager will promptly deliver to the Company any
subscription documents received by it and will promptly deliver
all checks executed by or delivered on behalf of prospective
investors to Xxxxxxxxxx Bank & Trust Co. (the "Escrow Agent") for
deposit in the escrow account in accordance with Section 8
hereof.
(f) Prior to participating in the offer and sale of the Shares, the
Dealer-Manager shall have reviewed the Prospectus and will have
reasonable grounds to believe that all material facts are
adequately and accurately disclosed and provide a basis for
evaluating the Company. In determining the adequacy of the
disclosed facts, the Dealer-Manager shall obtain written
information on material facts relating at a minimum to the
following, if relevant in view of the nature of the Offering:
(i) items of compensation;
(ii) physical properties;
4
(iii) tax aspects;
(iv) the Company's conflicts and risk factors; and
(v) appraisals and other pertinent reports.
Prior to executing a purchase transaction in the Company, the
Dealer-Manager or a person associated with it shall inform the
prospective investor of all pertinent facts relating to the
liquidity and marketability of an investment in the Shares.
(g) The Dealer-Manager represents that it has not engaged, and agrees
that it will not engage, in any activity with respect to the
Shares in violation of the 1934 Act, including Rule 10b-6
thereunder.
(h) Neither the Dealer-Manager nor any other person is authorized by
the Company to give any information or make any representations
in connection with this Agreement or the Offering other than
those contained in the Prospectus and any Authorized Sales
Literature furnished to the Dealer-Manager or authorized for use
by the Company. Without limiting the generality of the foregoing,
the Dealer-Manager will not publish, circulate or otherwise use
any other advertisement or solicitation material without the
prior written approval of the Company.
(i) The Dealer-Manager will require that each of the Soliciting
Dealers retained by it enter into a soliciting dealer agreement
similar in form to the one attached hereto as Exhibit A (a
"Soliciting Dealer Agreement").
(j) On becoming a Soliciting Dealer and in soliciting purchasers of
the Shares, the Dealer-Manager agrees to comply with the terms
and conditions imposed on the Soliciting Dealers pursuant to the
Soliciting Dealer Agreement.
(k) The blue sky survey for the Company indicates or will indicate
the jurisdictions where it is believed that offers and sales of
the Shares may be made under the applicable state securities laws
and regulations. In effecting offers or sales in a jurisdiction,
the Dealer-Manager will comply with all special conditions and
limitations imposed by such jurisdiction, as set forth in the
blue sky survey for the Company. If the blue sky survey for the
Company is not enclosed herewith, it will be made available to
the Dealer-Manager at a later date. In no circumstances will the
Dealer-Manager engage in any activities as a Soliciting Dealer
hereunder in any jurisdiction (a) which is not listed in the blue
sky survey as a jurisdiction where offers and sales of Shares may
be made under the blue sky or securities laws of such
jurisdiction or (b) in which the Dealer-Manager may not lawfully
so engage. The blue sky survey shall not be considered Authorized
Sales Literature.
5
SECTION 3. COMPENSATION OF DEALER-MANAGER.
(a) Except as provided in the "Selling and Escrow Arrangements"
section of the Prospectus, as compensation for the services of
the Dealer-Manager hereunder, the Company will pay to the
Dealer-Manager a selling commission of seven per cent (7%) of the
gross proceeds of the Shares sold and a dealer-manager fee in the
amount of two and one half per cent (2.5%) of the gross proceeds
of the Shares sold.
(b) The Dealer-Manager may re-allow all or any part of the selling
commission and up to one and one half percent (1.5%) of the
dealer-manager fee for which the Dealer-Manager was reimbursed by
the Company in respect of the Shares in the Company sold by such
Soliciting Dealer.
(c) No subscription shall be effective unless and until the
subscription payment is accepted by the Company, and the Company
reserves the right in its sole discretion to reject any
subscription payment submitted. In the event that a sale of
Shares for which one of the Soliciting Dealers engaged by the
Dealer-Manager has solicited a subscription shall not occur, for
whatever reason, no dealer-manager fee or selling commission with
respect to such Shares shall be paid to the Dealer-Manager or
such Soliciting Dealer.
SECTION 4. MUTUAL COVENANTS.
In the event that any party hereto shall learn of any circumstances or
facts, the existence of which causes such party to believe that such
circumstances or facts (i) render the Prospectus inaccurate or misleading as to
any material facts or (ii) should otherwise be disclosed in a supplement or
amendment to the Prospectus or any Authorized Sales Literature, such party will
promptly bring such circumstances or facts to the attention of each party
hereto. If, in the opinion of any party hereto or of counsel for any party
hereto, such circumstances or facts should be set forth in an amendment or
supplement to the Prospectus or to any Authorized Sales Literature, the Company
shall cause such amendment or supplement to be prepared promptly and shall make
available to the Dealer-Manager sufficient copies thereof for its own use and/or
distribution to the Soliciting Dealers.
SECTION 5. TERMINATION.
This Agreement may be terminated by written or telegraphic notice to
the Dealer-Manager from the Company, or upon the expiration or termination of
the Offering; provided, however, that such termination shall not relieve the
Company of the obligation to pay when due all fees payable to the Dealer-Manager
hereunder or the obligations of any of the parties hereto referred to under
Section 7 hereof.
SECTION 6. LIABILITY OF PARTIES.
Nothing herein contained shall constitute the Dealer-Manager, the
Soliciting Dealers and the Company as an association, partnership,
unincorporated business or other
6
separate entity, nor shall anything herein contained render the Company liable
for the obligations of any of the Soliciting Dealers. The Company shall not be
under any liability to any Soliciting Dealer or any other person for any act or
omission or any matter connected with this Agreement or the Company, except for
obligations expressly assumed by an association, partnership, unincorporated
business or other separate entity in this Agreement.
SECTION 7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Dealer-Manager
and each Soliciting Dealer from and against any and all losses,
claims, damages or liabilities, joint or several, to which the
Dealer-Manager and any Soliciting Dealer may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon a breach or alleged breach by the Company of
any of its representations and warranties or upon an untrue
statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse the Dealer-Manager and
each such Soliciting Dealer for any legal or other expenses
(including, but not limited to, reasonable attorneys' fees)
reasonably incurred by the Dealer-Manager and such Soliciting
Dealer in connection with investigating or defending any such
claim or action instituted against the Dealer-Manager or any such
Soliciting Dealer, whether or not resulting in any liability.
The indemnity agreement in this Section 7(a) will be in addition
to any liability which the Company may otherwise have and shall
extend upon the same terms and conditions to each person, if any,
who controls the Dealer-Manager and any Soliciting Dealer within
the meaning of the 1933 Act or 1934 Act, or is a registered
representative of such Dealer-Manager or Soliciting Dealer.
(b) The Dealer-Manager and each Soliciting Dealer will indemnify and
hold harmless the Company from and against any and all losses,
claims, damages or liabilities to which the Company may become
subject insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
(i) the failure or alleged failure by the Dealer-Manager and/or
such Soliciting Dealer to perform fully and to act in compliance
with the provisions of this Agreement or the Soliciting Dealer
Agreement, or (ii) any untrue statement or alleged untrue
statement of any material fact made by the Dealer-Manager or such
Soliciting Dealer to any offeree or purchaser of any of Shares
(other than any statement contained in the Prospectus or any
Authorized Sales Literature, or any amendment or supplement
thereto), or (iii) any omission or alleged omission by the
Dealer-Manager or such Soliciting Dealer to state to any offeree
or purchaser of any Shares a material fact
7
necessary in order to make the statements made to such offeree or
purchaser not misleading in light of the circumstances under
which they were made (other than any such material fact omitted
from the Prospectus, or any amendment or supplement thereto), and
will reimburse any legal or other expenses (including, but not
limited to, reasonable attorneys' fees) reasonably incurred by
the Company in connection with investigating or defending any
such claim or action, whether or not resulting in any liability.
The indemnity agreement in this Section 7(b) will be in addition
to any liability which the Dealer-Manager and/or such Soliciting
Dealer may otherwise have and shall extend upon the same terms
and conditions to each person signing the Registration Statement
on behalf of the Company and each person, if any, who controls
the Company within the meaning of the 1933 Act or the 1934 Act.
(c) No person shall be liable under the indemnity agreements
contained under Sections 7(a) and (b) hereof unless the person
requesting indemnification shall have notified such indemnifying
party within ten (10) business days after the summons or other
first legal process giving notice of the nature of the claim
shall have been served upon the indemnified party, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not
relieve him or it from any liability which he or it may have to
any indemnified party otherwise than under this Section 7. In
case any such action is brought against any indemnified party and
he or it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
therein and, to the extent that he or it may wish, jointly with
any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of his or
its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation.
(d) If the right to indemnification provided for in paragraphs (a),
(b) or (c) of this Section 7 would by its terms be available to a
person hereunder (collectively, the "Indemnified Parties" and
individually, an "Indemnified Party"), but is held to be
unavailable by a court of competent jurisdiction for any reason
other than because of the terms of such indemnification
provision, then the Company, the Dealer-Manager and the
Soliciting Dealers (collectively, the "Indemnifying Parties" and
individually, an "Indemnifying Party") shall contribute to the
aggregate of such losses, claims, damages and liabilities as are
contemplated in those paragraphs (including, but not limited to,
any investigation, legal and other expenses incurred in
connection with, and any
8
amount paid in settlement of, any claim, action, suit or
proceeding) in the ratio in which the proceeds of the Offering of
Shares have been actually received by each such Indemnifying
Party. For purposes of the preceding sentence, proceeds paid to
an Indemnifying Party hereunder and subsequently paid to another
Indemnifying Party or Indemnifying Parties pursuant to this
Agreement or otherwise, shall be deemed received by the last of
such Indemnifying Parties to whom or to which such proceeds were
paid. However, the right of contribution described in the
preceding sentences is subject to the following limitations:
(i) In no case shall any Indemnifying Party and the
persons who control such Indemnifying Party within the
meaning of applicable state and federal securities
laws be required to contribute any amount in excess of
the aggregate Offering proceeds actually received by
it and them (determined as described above); and
(ii) No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
Any Indemnified Party entitled to contribution will, promptly
after receipt of such notice of commencement of any action, suit,
proceeding or claim against him or it in respect of which a claim
for contribution may be made against another Indemnifying Party
or Indemnifying Parties, notify such other Indemnifying Party or
Indemnifying Parties. Failure to so notify such other
Indemnifying Party or Indemnifying Parties shall not relieve such
other Indemnifying Party or Indemnifying Parties from any other
obligation it or they may have hereunder or otherwise. If such
other Indemnifying Party or Indemnifying Parties are so notified,
such other Indemnifying Party or Indemnifying Parties shall be
entitled to participate in the defense of such action, suit,
proceeding or claim at its or their own expense or in accordance
with arrangements satisfactory to all parties who may be required
to contribute. After notice from such other Indemnifying Party or
Indemnifying Parties to the Indemnified Party entitled to
contribution of its or their election to assume its or their own
defense, the Indemnifying Party or Indemnifying Parties so
electing shall not be liable for any legal or other expenses of
litigation subsequently incurred by the Indemnified Party
entitled to contribution in connection with the defense thereof,
other than the reasonable costs of investigation. No person shall
be required to contribute with respect to any action or claim
settled without his or its consent.
SECTION 8. TRANSFER OF FUNDS.
The Dealer-Manager shall either directly, or through each Soliciting
Dealer, instruct subscribers to make their checks payable to Xxxxxxxxxx Bank &
Trust Escrow Account. If the Dealer-Manager receives a check not conforming to
the foregoing
9
instructions it shall return such check directly to such subscriber not later
than the end of the next business day following its receipt. Checks received by
the Dealer-Manager which conform to the foregoing instructions shall be
transmitted for deposit by the Dealer-Manager as soon as practicable to the
Escrow Agent, but in any event by noon of the second business day following
receipt by the Dealer-Manager.
SECTION 9. NOTICES.
Any notice hereunder shall be in writing or by telegram and if to the
Dealer-Manager shall be deemed to have been duly given if delivered or sent to
the Dealer-Manager at the address to which this letter is addressed, and if to
the Company, if delivered or sent to it c/o Boston Capital Corporation at Xxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000.
SECTION 10. PARTIES IN INTEREST.
The Agreement herein set forth is intended solely for the benefit of
the Dealer-Manager, each Soliciting Dealer and the Company (and, to the extent
provided in Section 7 hereof certain parties associated therewith), and their
respective successors and assigns, and no other person shall acquire or have any
right by virtue of this Agreement, and the term "successors and assigns" as used
herein shall not include any subscriber or purchaser, as such, of Shares.
SECTION 11. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of The Commonwealth of Massachusetts.
SECTION 12. AMENDMENT.
This Agreement may be amended by an agreement in writing signed by the
parties hereto.
10
SECTION 13. CONFIRMATION.
Please confirm your agreement to become the Dealer-Manager under the
terms and conditions herein set forth by signing and returning the confirmation
on the enclosed duplicate copy of this letter to us at the above address.
Very truly yours,
BOSTON CAPITAL REAL ESTATE
INVESTMENT TRUST, INC.
By:
---------------------------------
Xxxxxxx X. Xxxxxxxxx,
President
Confirmed: BOSTON CAPITAL SERVICES, INC.
-----------------, 2003 By:
---------------------------------
Xxxxxxx X. XxXxxxxx,
President
11
EXHIBIT A
BOSTON CAPITAL REAL ESTATE INVESTMENT TRUST, INC.
Up to 21,000,000 Shares of Common Stock/$210,000,000
SOLICITING DEALER AGREEMENT
_____________ ___, 2003
Dear Sir or Madam:
Boston Capital Real Estate Investment Trust, Inc., a Maryland
corporation (the "Company"), is registering with the Securities and Exchange
Commission (the "Commission") for public sale (the "Offering") a maximum of
21,000,000 shares of its Common Stock, $.001 par value per share (the "Shares"),
to be issued and sold for an aggregate purchase price of $210,000,000
(20,000,000 shares to be offered to the public and 1,000,000 shares to be
offered pursuant to the Company's dividend reinvestment plan). The Shares are to
be sold for a per share cash purchase price of $10.00, and the minimum purchase
by any one person is 100 shares except as otherwise indicated in the Prospectus
or in any letter or memorandum from the Company to Boston Capital Services, Inc.
(the "Dealer-Manager").
The undersigned Dealer Manager has entered into a Dealer-Manager
Agreement (the "Dealer-Manager Agreement") with the Company pursuant to which
the Dealer-Manager has agreed to use its best efforts to form and manage a group
of securities dealers (the "Soliciting Dealers") consisting of brokers and
dealers who shall be members in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"), for the purpose of soliciting purchasers
of the Shares. You are invited to become one of the Soliciting Dealers and, by
your confirmation hereof, you agree to act in such capacity and to use your best
efforts, in accordance with the following terms and conditions, to obtain
purchasers of Shares.
SECTION 1. SOLICITATION.
You hereby agree to solicit, as an independent contractor and not as
the agent of the Dealer-Manager or the Company, persons acceptable to the
Company who will acquire Shares. In connection with the execution of this
Agreement and your solicitation of purchasers of the Shares, you hereby
acknowledge that no subscriptions for Shares will be effective unless and until
accepted by the Company and hereby covenant, represent and warrant to the
Dealer-Manager and the Company as follows:
(a) Solicitation and other activities by you hereunder shall be
undertaken only in accordance with this Agreement, the Securities
Act of 1933, as amended (the "1933 Act") and the applicable rules
and regulations of the Commission.
(b) You hereby acknowledge receipt of copies of the Prospectus
describing the terms of the Offering and the Shares offered
thereby, including the Subscription Agreement as an attachment
thereto. Additional copies of the
Prospectus will be supplied in reasonable quantities upon your
request. Neither you nor any other person is authorized by the
Company to give any information or make any representations in
connection with this Agreement or the Offering of the Shares
other than those contained in the Prospectus and other authorized
solicitation material furnished by the Company or the
Dealer-Manager ("Authorized Sales Literature"). Without limiting
the generality of the foregoing, you agree not to publish,
circulate or otherwise use any other advertisement or
solicitation material other than Authorized Sales Literature.
Further, you agree that should you distribute any Authorized
Sales Literature to prospective purchasers, such distribution
shall be accompanied or preceded by the Prospectus as then
currently in effect.
(c) You represent that you have not engaged, and agree that you will
not engage, in any activity in respect of the Shares in violation
of the Securities Exchange Act of 1934, as amended (the "1934
Act"), including Rule l0b-6 thereunder.
(d) In recommending to a potential investor the purchase of Shares,
you or someone associated with you shall have reasonable grounds
to believe, on the basis of information obtained from the
potential investor concerning his investment objectives, other
investments, financial situation and needs, and any other
information known by you or such person associated with you,
that:
(i) The potential investor has a net worth sufficient to
sustain the risks inherent in an investment in the
Company, including loss of investment and lack of
liquidity; and
(ii) The Company is otherwise suitable for such potential
investor.
You further agree to provide the Dealer-Manager with all the
information you obtained to determine a potential investor's
suitability.
(e) You agree to instruct subscribers to make their checks payable to
Xxxxxxxxxx Bank & Trust Escrow Account. Any Soliciting Dealer
receiving a check not conforming to the foregoing instructions
shall return such check directly to such subscriber no later than
the end of the next business day following its receipt. Checks
received by Soliciting Dealers which conform to the foregoing
instructions shall be transmitted to the Dealer-Manager with
accompanying subscription documents pursuant to one of the
following methods:
(i) Where, pursuant to a Soliciting Dealer's internal
supervisory procedures, internal supervisory review is
conducted at the same location at which subscription
documents and checks are received, such checks will be
transmitted by noon of the next business day following
receipt by the Soliciting Dealer; and
(ii) Where, pursuant to a Soliciting Dealer's internal
supervisory procedures, final internal supervisory review
is conducted at a different location, checks will be
transmitted by noon of the next business day following
2
receipt by the Soliciting Dealer to the office of the
Soliciting Dealer conducting such final internal
supervisory review (the "Final Review Office"). The Final
Review Office will in turn transmit such checks for deposit
to the Escrow Agent by noon of the next business day
following receipt thereof by the Final Review Office.
The Dealer-Manager will forward all checks to the Escrow Agent as
soon as practicable following processing. In conjunction with all
of the foregoing procedures, investor checks and subscription
documentation delivered on Saturdays, Sundays and holidays will
be treated as not having been received until the first business
day thereafter.
(f) You will maintain in your files documents disclosing the basis
upon which the determination of suitability was reached as to
each potential investor. You hereby represent that you will
communicate to each of your sales agents, representatives and
other appropriate persons associated with you the
above-referenced suitability standards. Notwithstanding the
provisions of this Section 1, you shall not execute any
transaction in the Company in a discretionary account without
prior written approval of the transaction by the potential
investor.
(g) Prior to participating in the Offering, you or a person
associated with you shall have reasonable grounds to believe,
based on information made available to you or such person by the
Company through the Prospectus or other materials, that all
material facts are adequately and accurately disclosed and
provide a basis for evaluating the Company.
(h) In determining the adequacy of disclosed facts pursuant to
Section 1(g) hereof, you or a person associated with you shall
obtain information on material facts relating at a minimum to the
following, if relevant in view of the nature of the Company:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects;
(iv) the Company's conflicts and risk factors; and
(v) appraisals and other pertinent reports.
(i) For purposes of Sections 1(g) and 1(h) hereof, you or a person
associated with you may rely upon the results of an inquiry
conducted by another member or members of the NASD, provided
that:
(i) You or such person associated with you has reasonable
grounds to believe that such inquiry was conducted with due
care;
3
(ii) The results of the inquiry were provided to you or such
person associated with you with the consent of the NASD
member or members conducting or directing the inquiry; and
(iii) No NASD member that participated in the inquiry is a
sponsor of the Company or an affiliate of such a sponsor.
(j) Prior to executing a purchase transaction in the Company, you or
a person associated with you shall inform the prospective
investor of all pertinent facts relating to the liquidity and
marketability of an investment in the Shares.
(k) You shall not, directly or indirectly, pay or award any finder's
fees, commissions or other compensation to any person engaged by
a potential investor for investment advice as an inducement for
such advisor to advise the purchase of Shares; provided, however,
that normal sales commissions payable to a duly registered
broker-dealer or other properly licensed person, who is a member
of the NASD, for selling Shares shall not be prohibited hereby.
(l) You shall comply with all rules and regulations relating to the
suitability of investors including, without limitation, the
provisions of Article III.C of the Statement of Policy Regarding
Real Estate Investment Trusts of the North American Securities
Administrators Association, Inc.
(m) So long as the Shares have not been listed on a national
securities exchange or market, you shall, in recommending the
purchase, sale or transfer of Shares to an investor, (i) inform
such investor of all pertinent facts relating to the liquidity
and marketability of Shares; and (ii) have reasonable grounds to
believe, based on information obtained from the investor, that an
investment in the Shares is suitable for such investor.
SECTION 2. COMPENSATION OF SOLICITING DEALERS.
Except as provided in the "Selling and Escrow Arrangements" section of
the Prospectus, as compensation for the services of the Soliciting Dealers
hereunder, the Dealer-Manager will re-allow, as a selling commission, a portion
of the funds received by it from the Company as a selling commission in an
amount up to seven per cent (7%) of the purchase price for each Share sold to a
subscriber through such Soliciting Dealer's efforts with respect to the Company.
In addition, the Dealer-Manager may re-allow to the Soliciting Dealers hereunder
a portion of the funds received by it from the Company as a dealer-manager fee
in an amount up to one and one half percent (1.5%) of the purchase price for
each Share sold to a subscriber though such Soliciting Dealer's efforts with
respect to the Company. A Soliciting Dealer shall be entitled to the foregoing
compensation only if (i) the insertion of such Soliciting Dealer's name has been
made in the Subscription Agreement relating to the subscriber's Shares, (ii) an
account executive from such Soliciting Dealer has executed the certification
contained in Part 8 of the subscriber's Subscription Agreement, (iii) such
Soliciting Dealer has executed this Agreement in the
4
form hereof and delivered it to the Dealer-Manager, and (iv) the subscriber is
admitted as a stockholder for the number of Shares indicated in his Subscription
Agreement.
SECTION 3. BLUE SKY AND SECURITIES LAWS.
The Dealer-Manager assumes no obligation or responsibility in respect
of the qualification of the Shares under the laws of any jurisdiction. The blue
sky survey for the Company indicates or will indicate the jurisdictions where it
is believed that offers and sales of the Shares may be effected under the
applicable blue sky or state securities laws. In effecting offers or sales in a
jurisdiction, you will comply with all special conditions and limitations
imposed by such jurisdiction, as set forth in the blue sky survey for the
Company. If the blue sky survey for the Company is not enclosed herewith, it
will be made available to you at a later date. In no circumstances will you, as
a Soliciting Dealer, engage in any activities hereunder in any jurisdiction (a)
which is not listed in the blue sky survey as a jurisdiction where offers and
sales of the Shares may be effected under the blue sky or state securities laws
of such jurisdiction or (b) in which you may not lawfully so engage. The blue
sky survey shall not be considered Authorized Sales Literature.
SECTION 4. TERMINATION.
This Agreement may be terminated by written notice sent or delivered to
you by the Dealer-Manager, or upon the expiration or termination of the Offering
of Shares, provided, however, that such termination shall not relieve the
Dealer-Manager of the obligation to pay when due all fees payable to you
hereunder or its obligations referred to under Section 6 hereof, and shall not
relieve you of any obligation or any liability under this Agreement, and all
representations and warranties shall survive the termination of this Agreement.
SECTION 5. LIABILITY OF THE PARTIES.
Nothing herein contained shall constitute the Dealer-Manager, the
Soliciting Dealers and the Company as an association, partnership,
unincorporated business or other separate entity, nor shall anything herein
contained render the Dealer-Manager or the Company liable for the obligations of
any of the Soliciting Dealers. Neither the Dealer-Manager nor the Company shall
be under any liability to any Soliciting Dealer or any other person for any act
or omission or any matter connected with this Agreement or the Company, except
for obligations expressly assumed by an association, partnership, unincorporated
business or other separate entity in this Agreement.
SECTION 6. INDEMNIFICATION.
Under the Dealer-Manager Agreement, a copy of which is included as an
Exhibit to the Registration Statement, the Company has agreed to indemnify and
hold harmless various parties, including each Soliciting Dealer and any party
who controls such Soliciting Dealer within the meaning of the 1933 Act and the
1934 Act, from certain liabilities, and the Dealer-Manager and the Soliciting
Dealers have similarly agreed to indemnify the Company and certain associated
parties. The indemnification provisions of the Dealer-Manager Agreement are
attached hereto as Exhibit A. In executing the Dealer-Manager Agreement, to
which the form of this Soliciting Dealer Agreement is attached as Exhibit A,
5
the Dealer-Manager acted as the representative of each of the Soliciting
Dealers, and the Soliciting Dealers shall thus be deemed to be in privity of
contract with the Company. By your acceptance hereof, you ratify the action of
the Dealer-Manager in executing the Dealer-Manager Agreement on your behalf.
Furthermore, you hereby indemnify the Dealer-Manager and hold it harmless for
any losses, claims, damages, costs and other expenses (including reasonable
attorneys' fees and costs) incurred by the Dealer-Manager as a result of your
violation or breach of the terms (including your covenants, representations and
warranties), conditions and obligations of this Agreement. The Dealer-Manager
hereby agrees to indemnify each Soliciting Dealer and hold it harmless for any
losses, claims, damages, costs and other expenses (including reasonable
attorneys' fees and costs) reasonably incurred by a Soliciting Dealer as a
result of the Dealer-Manager's violation or breach of the terms (including its
representations and warranties under the Dealer-Manager Agreement) of this
Agreement.
SECTION 7. NOTICES.
Any notice hereunder shall be in writing and, if to you as a Soliciting
Dealer, shall be deemed to have been duly given if delivered or sent to you at
the address set forth below, and if to the Dealer-Manager, if delivered or sent
to us at Xxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
SECTION 8. PARTIES IN INTEREST.
The Agreement herein set forth is intended solely for the benefit of
each Soliciting Dealer, the Dealer-Manager and the Company (and to the extent
provided in Section 6 hereof certain parties associated therewith, and their
successors and assigns), and no other person shall acquire or have any right by
virtue of this Agreement, and the terms "successors and assigns," as used
herein, shall not include any subscriber for or purchasers of the Shares, as
such.
SECTION 9. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
SECTION 10. AMENDMENT.
This Agreement may be amended by an agreement in writing signed by all
of the parties hereto.
6
SECTION 11. CONFIRMATION.
Please confirm your agreement to become one of the Soliciting Dealers
under the terms and conditions herein set forth by signing and returning the
confirmation on the enclosed duplicate copy of this letter to the undersigned
Boston Capital Services, Inc., Xxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx.
Very truly yours,
BOSTON CAPITAL SERVICES, INC.
By:
---------------------------------
Xxxxxxx X. XxXxxxxx,
: President
SOLICITING DEALER
-------------------------------
Print Name
CONFIRMED By:
---------------------------------
Authorized Signature
------------------- , 2003 Address of Soliciting Dealer:
------------------------------------
Xxxxxx
------------------------------------
Xxxx Xxxxx Zip Code
7
Commission Officer:
-------------------------------------
Due Diligence Officer:
-------------------------------------
Marketing Officer:
-------------------------------------
-------------------------------------
-------------------------------------
Note: If applicable, please enclose lists of Branch Offices, Branch Managers and
Registered Representatives.
8
Exhibit A to Soliciting Dealer Agreement
SECTION 7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Dealer-Manager
and each Soliciting Dealer from and against any and all losses,
claims, damages or liabilities, joint or several, to which the
Dealer-Manager and any Soliciting Dealer may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon a breach or alleged breach by the Company of
any of its representations and warranties or upon an untrue
statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse the Dealer-Manager and
each such Soliciting Dealer for any legal or other expenses
(including, but not limited to, reasonable attorneys' fees)
reasonably incurred by the Dealer-Manager and such Soliciting
Dealer in connection with investigating or defending any such
claim or action instituted against the Dealer-Manager or any such
Soliciting Dealer, whether or not resulting in any liability.
The indemnity agreement in this Section 7(a) will be in addition
to any liability which the Company may otherwise have and shall
extend upon the same terms and conditions to each person, if any,
who controls the Dealer-Manager and any Soliciting Dealer within
the meaning of the 1933 Act or 1934 Act, or is a registered
representative of such Dealer-Manager or Soliciting Dealer.
(b) The Dealer-Manager and each Soliciting Dealer will indemnify and
hold harmless the Company from and against any and all losses,
claims, damages or liabilities to which the Company may become
subject insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
(i) the failure or alleged failure by the Dealer-Manager and/or
such Soliciting Dealer to perform fully and to act in compliance
with the provisions of this Agreement or the Soliciting Dealer
Agreement, or (ii) any untrue statement or alleged untrue
statement of any material fact made by the Dealer-Manager or such
Soliciting Dealer to any offeree or purchaser of any of Shares
(other than any statement contained in the Prospectus or any
Authorized Sales Literature, or any amendment or supplement
thereto), or (iii) any omission or alleged omission by the
Dealer-Manager or such Soliciting Dealer to state to any offeree
or purchaser of any Shares a material fact necessary in order to
make the statements made to such offeree or purchaser not
misleading in light of the circumstances under
9
which they were made (other than any such material fact omitted
from the Prospectus, or any amendment or supplement thereto), and
will reimburse any legal or other expenses (including, but not
limited to, reasonable attorneys' fees) reasonably incurred by
the Company in connection with investigating or defending any
such claim or action, whether or not resulting in any liability.
The indemnity agreement in this Section 7(b) will be in addition to any
liability which the Dealer-Manager and/or such Soliciting Dealer
may otherwise have and shall extend upon the same terms and
conditions to each person signing the Registration Statement on
behalf of the Company and each person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act.
(c) No person shall be liable under the indemnity agreements
contained under Sections 7(a) and (b) hereof unless the person
requesting indemnification shall have notified such indemnifying
party within ten (10) business days after the summons or other
first legal process giving notice of the nature of the claim
shall have been served upon the indemnified party, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not
relieve him or it from any liability which he or it may have to
any indemnified party otherwise than under this Section 7. In
case any such action is brought against any indemnified party and
he or it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
therein and, to the extent that he or it may wish, jointly with
any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of his or
its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation.
(d) If the right to indemnification provided for in paragraphs (a),
(b) or (c) of this Section 7 would by its terms be available to a
person hereunder (collectively, the "Indemnified Parties" and
individually, an "Indemnified Party"), but is held to be
unavailable by a court of competent jurisdiction for any reason
other than because of the terms of such indemnification
provision, then the Company, the Dealer-Manager and the
Soliciting Dealers (collectively, the "Indemnifying Parties" and
individually, an "Indemnifying Party") shall contribute to the
aggregate of such losses, claims, damages and liabilities as are
contemplated in those paragraphs (including, but not limited to,
any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any claim,
action, suit or proceeding) in the
10
ratio in which the proceeds of the Offering of Shares have been
actually received by each such Indemnifying Party. For purposes
of the preceding sentence, proceeds paid to an Indemnifying Party
hereunder and subsequently paid to another Indemnifying Party or
Indemnifying Parties pursuant to this Agreement or otherwise,
shall be deemed received by the last of such Indemnifying Parties
to whom or to which such proceeds were paid. However, the right
of contribution described in the preceding sentences is subject
to the following limitations:
(i) In no case shall any Indemnifying Party and the persons
who control such Indemnifying Party within the meaning
of applicable state and federal securities laws be
required to contribute any amount in excess of the
aggregate Offering proceeds actually received by it and
them (determined as described above); and
(ii) No person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be
entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Any Indemnified Party entitled to contribution will, promptly after receipt of
such notice of commencement of any action, suit, proceeding or claim against him
or it in respect of which a claim for contribution may be made against another
Indemnifying Party or Indemnifying Parties, notify such other Indemnifying Party
or Indemnifying Parties. Failure to so notify such other Indemnifying Party or
Indemnifying Parties shall not relieve such other Indemnifying Party or
Indemnifying Parties from any other obligation it or they may have hereunder or
otherwise. If such other Indemnifying Party or Indemnifying Parties are so
notified, such other Indemnifying Party or Indemnifying Parties shall be
entitled to participate in the defense of such action, suit, proceeding or claim
at its or their own expense or in accordance with arrangements satisfactory to
all parties who may be required to contribute. After notice from such other
Indemnifying Party or Indemnifying Parties to the Indemnified Party entitled to
contribution of its or their election to assume its or their own defense, the
Indemnifying Party or Indemnifying Parties so electing shall not be liable for
any legal or other expenses of litigation subsequently incurred by the
Indemnified Party entitled to contribution in connection with the defense
thereof, other than the reasonable costs of investigation. No person shall be
required to contribute with respect to any action or claim settled without his
or its consent.
11
